Is an Economic Growth Explosion Imminent?

On the road, I haven’t had a chance to read this paper yet, but I pass it along as a matter of interest:

Theory predicts that global economic growth will stagnate and even come to an end due to slower and eventually negative growth in population. It has been claimed, however, that Artificial Intelligence (AI) may counter this and even cause an economic growth explosion. In this paper, we critically analyse this claim. We clarify how AI affects the ideas production function (IPF) and propose three models relating innovation, AI and population: AI as a research-augmenting technology; AI as researcher scale enhancing technology; and AI as a facilitator of innovation. We show, performing model simulations calibrated on USA data, that AI on its own may not be sufficient to accelerate the growth rate of ideas production indefinitely. Overall, our simulations suggests that an economic growth explosion would only be possible under very specific and perhaps unlikely combinations of parameter values. Hence we conclude that it is not imminent.

That is from Derick Almeida, Wim Naudé, and Tiago Sequeira.

Lawyering in the Age of Artificial Intelligence

We conducted the first randomized controlled trial to study the effect of AI assistance on human legal analysis. We randomly assigned law school students to complete realistic legal tasks either with or without the assistance of GPT-4. We tracked how long the students took on each task and blind-graded the results. We found that access to GPT-4 only slightly and inconsistently improved the quality of participants’ legal analysis but induced large and consistent increases in speed. AI assistance improved the quality of output unevenly—where it was useful at all, the lowest-skilled participants saw the largest improvements. On the other hand, AI assistance saved participants roughly the same amount of time regardless of their baseline speed. In follow up surveys, participants reported increased satisfaction from using AI to complete legal tasks and correctly predicted the tasks for which GPT-4 were most helpful. These results have important descriptive and normative implications for the future of lawyering. Descriptively, they suggest that AI assistance can significantly improve productivity and satisfaction, and that they can be selectively employed by lawyers in areas where they are most useful. Because these tools have an equalizing effect on performance, they may also promote equality in a famously unequal profession. Normatively, our findings suggest that law schools, lawyers, judges, and clients should affirmatively embrace AI tools and plan for a future in which they will become widespread.

That is by Jonathan H. Choi, Amy Monahan, and Daniel Schwarcz, forthcoming in the Minnesota Law Review.  Via the excellent Kevin Lewis.

Have CEOs changed?

Here is a recent paper by Yann Decressin, Steven N. Kaplan, and Morten Sorensen:

Using more than 4,900 assessments, we study changes in the characteristics and objectives of CEOs and top executives since 2001. The same four factors explain roughly half of the variation of assessed CEO characteristics in this larger sample of executive assessments as in Kaplan and Sorensen (2021). After the global financial crisis (GFC), the average interviewed CEO candidate has lower overall ability, is more execution oriented / less interpersonal, less charismatic and less creative / strategic than pre-GFC. Except for overall ability, these differences persist in hired CEOs. Interpersonal or “softer” skills, if anything, decline over time for both CEO candidates and hired CEOs. Pre- and post-GFC, we find a positive correlation between the ability of assessed CEOs and other C-level executives assessed at the same company, suggesting that higher ability executives complement each other. Finally, we look at the relation of the objectives for which the CEOs are interviewed to CEO characteristics.

Via the excellent Kevin Lewis.

My excellent Conversation with Marilynne Robinson

Here is the audio, video, and transcript.  Here is the episode summary:

Marilynne Robinson is one of America’s best and best-known novelists and essayists, whose award-winning works like Housekeeping and Gilead explore themes of faith, grace, and the intricacies of human nature. Beyond her writing, Robinson’s 25-year tenure at the famed Iowa Writers’ Workshop allowed her to shape and inspire the new generations of writers. Her latest book, Reading Genesis, displays her scholarly prowess, analyzing the biblical text not only through the lens of religious doctrine but also appreciating it as a literary masterpiece.

She joined Tyler to discuss betrayal and brotherhood in the Hebrew Bible, the relatable qualities of major biblical figures, how to contend with the Bible’s seeming contradictions, the true purpose of Levitical laws, whether we’ve transcended the need for ritual sacrifice, the role of the Antichrist, the level of biblical knowledge among students, her preferred Bible translation, whether The Winter’s Tale makes sense, the evolution of Calvin’s reputation and influence, why academics are overwhelmingly secular, the success of the Iowa Writer’s Workshop, why she wrote a book on nuclear pollution, what she’ll do next, and more.

And an excerpt:

COWEN: As a Calvinist, too, would not, in general, dismiss the Old Testament, what do you make of a book such as Leviticus? It’s highly legalistic, highly ritualistic. Some Christians read Leviticus and become a split Christian Jew almost. Other Christians more or less dismiss the book. How does it fit into your worldview?

ROBINSON: I think that when you read Herodotus, where he describes these little civilizations that are scattered over his world — he describes them in terms of what they eat or prohibit, or they paint themselves red, or they shave half their head. There are all these very arbitrary distinctions that people make in order to identify with one clan over against another.

At the point of Leviticus, which of course, is an accumulation of many texts over a very long time, no doubt, but nevertheless, to think of it as being Moses — he is trying to create a defined, distinctive human community. By making arbitrary distinctions between people so that you’re not simply replicating notions of what is available or feasible or whatever, but actually asking them to adopt prohibitions of food — that’s a very common distinguishing thing in Herodotus and in contemporary life.

So, the arbitrariness of the laws is not a fault. It is a way of establishing identification of one group as separate from other groups.

COWEN: So, you read it as a narrative of how human communities are created, but you still would take a reading of, say, Sermon on the Mount that the Mosaic law has been lifted? Or it’s still in place?

ROBINSON: Oh, it’s not still in place. We’ve been given other means by which to create identity. Moses was doing something distinctive in a certain period of the evolution of Israel as a people. He didn’t want them to be Egyptians. He didn’t want them to subscribe to the prevailing culture, which was idolatrous, and so on. He’s doing Plato in The Republic. He’s saying, “This is how we develop the idea of a community.”

Having said that, then there are certain other things like “Thou shall not kill,” or whatever, that become characterizing laws. Jesus very often says, when someone says to him, “How can I be saved?” He says, “You know the commandments.” It’s not as if God is an alien figure from the point of view of Christ, whom we take to be his son.

Interesting throughout.

*Build, Baby, Build*, by Bryan Caplan

Here is my blurb for the book:

“Bryan Caplan is a pioneer in the use of graphic novels to expound economic concepts. His new book Build, Baby, Build is thus a landmark in economic education, how to present economic ideas, and the integration of economic analysis and graphic visuals. If you want to learn the economics, ethics, and political economy of YIMBY— namely the freedom to build this is the very best place to start.”

And from Bryan:

Please forgive my laughable arrogance, but I assure you that BBB is the most fascinating book on housing regulation ever written. In fact, I assure you that there will never be a more fascinating book on housing regulation!

While objective self-interest impels you to buy the book as soon as it releases, it would be a huge favor to me if you would take the extra step of pre-ordering right away from AmazonBarnes and NobleBookshopApple Books, or anywhere else. Why? Because all pre-orders count as “first-week sales” for national best-seller lists — and I’m aiming high.

Here is the book’s home page.  It is really very good.

Wednesday assorted links

1. Are more stable rock bands more likely to be successful?

2. Harvard will not proceed with its geoengineering experiment.  I think you can guess why not.

3. The Zvi on Devin.

4. Is there ever a labor market motherhood premium?

5. Mysteries of the Gardner Museum theft (NYT).

6. “Police Scotland’s officers are being told they should target actors and comedians under Scotland’s new hate crime laws.” (mostly gated, you can read a bit of it)

7. Regulatory arbitrage, tech no-mergers edition.

8. Noah on various matters, including the Canadian economy (I think he is putting too much weight on the last two years, no doubt they are in a downturn).

LDS principles for AI

Knowing that the proper use of AI will help the Church accomplish God’s work of salvation and exaltation, the Church has issued the following guiding principles for using AI. These were introduced to employees of The Church of Jesus Christ of Latter-day Saints worldwide on Wednesday, March 13, 2024, by Elder Gerrit W. Gong of the Quorum of the Twelve Apostles (co-chair of the Church Communication Committee) and Elder John C. Pingree of the Seventy (executive director of the Correlation Department).

Here is the full link, better than most of what is done in this area.  For instance:

  • The Church will use artificial intelligence to support and not supplant connection between God and His children.
  • The Church will use artificial intelligence in positive, helpful, and uplifting ways that maintain the honesty, integrity, ethics, values, and standards of the Church…
  • The Church’s use of artificial intelligence will safeguard sacred and personal information.

Worth a ponder.  Via Tyler Ransom.

Tuesday assorted links

1. Long paper on how the grid is regulated, co-authored by an uncle of Matt Yglesias.

2. Sam Altman on Lex, transcript (it’s happening).  They will be doing amazing things over the course of 2024 (and beyond).  And a ChatGPT billing joke.

3. Are college extracurriculars replacing studying and reading?

4. Toyota building a smart city.

5. PEPFAR will be extended.

6. How to run a CIA base in Afghanistan.

7. Python farming as a flexible and efficient form of agricultural food security.

Scenarios for the Transition to AGI

By Anton Korinek and Donghyun Suh, in a new NBER working paper:

We analyze how output and wages behave under different scenarios for technological progress that may culminate in Artificial General Intelligence (AGI), defined as the ability of AI systems to perform all tasks that humans can perform. We assume that human work can be decomposed into atomistic tasks that differ in their complexity. Advances in technology make ever more complex tasks amenable to automation. The effects on wages depend on a race between automation and capital accumulation. If automation proceeds sufficiently slowly, then there is always enough work for humans, and wages may rise forever. By contrast, if the complexity of tasks that humans can perform is bounded and full automation is reached, then wages collapse. But declines may occur even before if large-scale automation outpaces capital accumulation and makes labor too abundant. Automating productivity growth may lead to broad-based gains in the returns to all factors. By contrast, bottlenecks to growth from irreproducible scarce factors may exacerbate the decline in wages.

The best paper on these topics so far?  And here is a recent Noah Smith piece on employment as AI proceeds.  And a recent Belle Lin WSJ piece, via Frank Gullo, “Tech Job Seekers Without AI Skills Face a New Reality: Lower Salaries and Fewer Roles.”  And here is a proposal for free journalism school for everybody (NYT, okie-dokie!).

My interview with Sam Matey

He is a podcaster who mainly does transcripts.  Our discussion was largely but by no means entirely about climate change, here is one excerpt:

Sam: And India also is building huge amounts of new renewable and other electricity generating capacity. They’re building electric rail networks. They seem to be hitting their stride in a way that China was in about 2000 or 2005. I’m feeling optimistic about the rise of a new broadly-speaking-democratic powerful country in global markets and geopolitics.

Tyler: I would add the cautionary note that hardly anyone in India cares about climate change. Now, you may think they care about correlates to climate change, such as high temperatures in Delhi in the difficult months. But it’s very far from a national priority with any party that I’m aware of or any segment of the electorate. Air pollution is a major issue. But if there’s a way to fix air pollution, say through natural gas, that doesn’t, to a comparable degree, fix climate change, it could prove very popular in India.

So truly green energy has to be very cheap with the intermittency problem truly solved for India to make the transition, because there is not ideological momentum there at all.

And:

Sam: I agree that there’s not going to be a huge ideological drive to solve climate change in China or India, but I suspect that they will be doing a lot of the stuff that would have been considered a really ambitious climate change solving program 10 years ago, nonetheless, just for other reasons. Does that make sense?

Tyler: It makes sense, but keep in mind there’s also going to be technological progress for fossil fuels. And there has been; fracking was a big, big increase in productivity. It could spread to more parts of the world quite easily. The energy demands of the world, over some period of time, they could go up by 3x or 4x. And to think green energy will absorb all of that and cut into the current flows, I think it’s a bigger requirement than is often imagined.

Again, I wouldn’t say I’m pessimistic, but I’m not optimistic either. I’m genuinely uncertain.

And this:

Tyler: Maybe, but there’s two sources of quite green energy that have been declining. Nuclear we’ve already mentioned, but also hydroelectric. So some things are leaving the scene. And I would just say in general, looking at history, I’m very cautious about extrapolating either positive or negative trends. There’s so many efforts to do so. So in the 70s, there’s this great fear of overpopulation. Right now, there’s this great fear of a fertility crisis and underpopulation.

I’m not saying we shouldn’t think about either one of those, but it could well be neither comes to pass. Extrapolating current trends can rather rapidly lead us astray because of the power of the exponent. But maybe the world is just messy and not all that exponential.

In the latter part of the dialogue we talk about Morocco, Kenya, Mexico, Ethiopia, and the productivity crisis in Canada, among other issues.  Will Buddhism rise or fall in influence?  And what does it mean to suggest that books are overrated?

New results on intergenerational progress

The full paper title is “Has Intergenerational Progress Stalled? Income Growth Over Five Generations of Americans,” by Kevin Corrinth and Jeff Larrimore.  Here is the abstract:

We find that each of the past four generations of Americans was better off than the previous one, using a post-tax, post-transfer income measure constructed annually from 1963-2022 based on the Current Population Survey Annual Social and Economic Supplement. At age 36–40, Millennials had a real median household income that was 18 percent higher than that of the previous generation at the same age. This rate of intergenerational progress was slower than that experienced by the Silent Generation (34 percent) and Baby Boomers (27 percent), but similar to that experienced by Generation X (16 percent). Slower progress for Generation X and Millennials is due to their stalled growth in work hours—holding work hours constant, they experienced a greater intergenerational increase in real market income than Baby Boomers. Intergenerational progress for Millennials under age 30 has remained robust as well, although their income growth largely results from higher reliance on their parents. We also find that the higher educational costs incurred by younger generations is far outweighed by their lifetime income gains.

The emphasis added is from me, not from the authors.  Via the excellent Kevin Lewis.

What is wrong with movies these days?

Here is one bit from a longer and very interesting essay by Vicky Osterweil:

This kind of audience-condescending premise-forward literalism is not just in the narrative and scripting, it’s in the acting. The actors of Dune 2 almost all speak in that tedious whisper-growl that stands in for profundity, a vocal-style also popularized by Nolan, in Christian Bale’s portrayal of the caped crusader in 2005’s Batman Begins. I believe that if a movie features a bunch of good actors and all the performances are flat and dull, as is the case in Dune Part Two, where even Florence Pugh, Lea Seydoux and Josh Brolin lack all charisma, it is ultimately a reflection on the director (and the script), not the actors.

Worth reading the whole thing, though I think it is quite wrong about Russian constructivism in the visual arts, which is a far more diverse tradition than the author lets on.